Dungeons are semi-neutral sites representing dangerous locales, usually inhabited by hostile creatures and containing valuable resources, items and/or knowledge. Most dungeons are not initially visible on the map to the player, and if hidden requires discovery which can be accomplished by follower tasks (Search Province), army patrols, divination spells or events.

The exact nature of a dungeon varies greatly. Examples could be a haunted barrow mound, labyrinthine caverns, an area of wild magical forces, a smoldering volcano, etc. Most dungeons are controlled by a minor faction led by a boss, which is a special character or monster, often of considerable power. A dungeon may also host an ancient evil, but mechanically these are separate from the dungeon faction. A dungeon faction may appear to be such, but actually be an ancient evil faction.

Followers can be sent to dungeons, where they will explore and fight the inhabitants, trying to claim loot and uncover the secrets of the dungeon. The chance of a successful venture depends on the party and the nature of the dungeon. Positive outcomes include follower experience, loot, knowledge and dungeon progress. Negative outcomes include follower injuries, or even fatalities, angering the dungeon faction and various negative events.

Once the progress has reached a certain level, no more loot can be gained, but an assault on the boss can be launched. This is more risky and requires more heroes, usually even some military units.